When Philadelphia stops being polite: City takes ‘Real World’ house to court for unpaid taxes

Back in 2004 and 2005, The Real World house at Third and Arch was a mess. Union members set up a giant, inflatable rat outside to protest its construction, and once the cast members moved in they partied how Real Worlders do: With plenty of alcohol and without any self-awareness.

These days, some of that craziness has returned to the property for an entirely different reason. The City of Philadelphia and the Philadelphia School District have petitioned for a court-appointed manager to assume control of the old Real World house because its owner, Keble Associates, owes $26,285 in 2014 taxes, according to court documents. This marks the second consecutive year the city has challenged Keble Associates over the property. Keble also owes more than $20,000 in property taxes for 2015, according to real estate tax records.

The city’s move is called a petition for “sequestration.” To get the owner to pay the taxes it owes, the city asks the Court of Common Pleas to appoint a sequestrator. A sequestrator basically acts like a landlord. He or she takes care of the property, collects rent and pays whatever taxes are owed. If the sequestrator pays off the debt, the property can be returned to the owner. If the sequestrator deems it impossible to start a positive cash flow, he or she can report the problem to the city and a tax foreclosure process could begin.

According to court documents, representatives from the city and Keble Associates are scheduled to meet for a conference today. Last year, no sequestrator was appointed, and the city dropped its petition with the possibility it could bring up a complaint again, as it has this year.

The inside of the old Real World house. Via MSC Retail.

You’ve probably seen the Real World house before, even if you didn’t realize it was the Real World house. It’s located next to the Betsy Ross House, and has a history that goes back much deeper than the alcohol-fueled shenanigans of seven strangers. Built in 1902, it was a bank until 1970 when the Seamen’s Church Institute bought the property. In 2003, Yaron Properties bought it for $2.2 million and fixed it up for the Real World. The current owner, according to court documents, is Keble Associates. Keble Associates appears to be related to Yaron Properties. On an unrelated a court document from 2011, Yaron Properties’ owner Michael Yaron signed his name for Keble Associates.

To paraphrase a famous Real World line, here’s where the story starts getting real: Yaron was sentenced to federal prison in 2012 and is serving a five-year sentence for his participation in a kickback scheme. In addition to developing Old City, Yaron was also known for his philanthropy and political connections, including to Ed Rendell.

The phone number for Yaron Properties has been disconnected. Calls to Keble Associates, whose address is listed as the address for the old Real World house, went unanswered.

Last year, the property went up for sale with MSC Retail as a broker for $4.3 million. Jacob Cooper, principal of MSC Retail, told Billy Penn he is no longer involved with the sale.

Even if this whole sequestration thing happens, Keble Associates could still sell the property. But the city has entered a lien on the property. Whoever buys it would have to satisfy the city in addition to the owner.